Assessee Entitled To CENVAT Credit For Service Tax Paid On GTA Services Used To Transport Goods To Buyer's Premises: CESTAT
Mehak Dhiman
22 Nov 2024 10:10 AM IST
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the assessee is entitled to CENVAT credit of the service tax paid on the goods transport agency (GTA) services received by the assessee to transport the goods from its factory to the buyer's premises sold on FOR (free on road) destination basis. The Bench of Justice Dilip Gupta...
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the assessee is entitled to CENVAT credit of the service tax paid on the goods transport agency (GTA) services received by the assessee to transport the goods from its factory to the buyer's premises sold on FOR (free on road) destination basis.
The Bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that ““place of removal” shifts to the buyer's premises and the assessee is entitled to CENVAT credit of the service tax paid on GTA services availed to transport the goods to the buyer's premises.”
The assessee/appellant sold goods on a FOR (Free on Road) destination basis, meaning the sale was made for delivery at the buyer's premises. The issue was whether, in such sales, the place of removal is the assessee's factory or the buyer's premises.
The Additional Commissioner disallowed the CENVAT credit of the service tax paid on the goods transport agency (GTA) services received by the assessee to transport the cement from its factory to the buyer's premises sold on FOR (free on road) destination basis.
Aggrieved by the decision of Additional Commissioner the assessee filed an appeal to the Commissioner (Appeals), Central Excise and CGST who rejected the appeal and upheld the order of the Additional Commissioner. The assessee has challenged the order passed by the Commissioner (Appeals) before the Tribunal.
The Revenue submitted that the place of removal continues to be seller's factory and therefore no CENVAT credit of the service tax paid on the GTA services availed by the assessee to transport the goods up to the buyer's premises where the goods are sold on FOR destination basis is available to them.
The bench referred to the case of Ramco Cement v. CCE [Excise Appeal No. 40575 OF 2018] where the CESTAT Chennai decided that where the goods are sold on FOR destination basis and the ownership of the goods gets transferred at the customer's premises, the place of removal shifts to the buyer's premises.
The bench noted that the “place of removal” shifts to the buyer's premises and the assessee is entitled to CENVAT credit of the service tax paid on GTA services availed to transport the goods to the buyer's premises.
In view of the above, the Tribunal allowed the appeal.
Counsel for Appellant/ Assessee: Hemant Bajaj
Counsel for Respondent/ Department: Bhagwat Dayal
Case Title: M/s Ambuja Cements Limited v. Commissioner (Appeals), Central Goods & Service Tax, Central Excise
Case Number: EXCISE APPEAL NO. 51427 OF 2022
